India's Next Warships and Submarines Will Have to be Built at Home

India’s Defense Ministry has decided that its orders for future ships, including submarines, will be exclusively available for domestic shipyards, according to a Defense News report. The Indian Navy could potentially have in excess of $50 billion in contracts over the next 10 years for new ships and submarines.

India’s navy is embarking on a major indigenous modernization effort. As The Diplomat reported recently, the Indian government cleared plans for an $8 billion indigenous development program for important naval assets. This included six nuclear-powered submarines and seven stealth frigates.

In fall 2014, India’s Defense Acquisition Council (DAC) approved a $12 billion project for six conventional submarines. According to the Defense News report, this project will still allow the participation of foreign vendors “in the design phase.” The submarines will have to be built in Indian shipyards.

Under the new directive, private shipyards in India will likely be the greatest beneficiaries. India’s state-run shipyards are already occupied with ongoing projects. Mazagon Dock Limited is building India’s six Scorpene-class diesel-electric submarines.

The decision to limit ship purchases to domestic yards comes after New Delhi all but formally scrapped the years-long tender for its medium multi-role combat aircraft (MMRCA), opting instead to purchase 36 ready-to-fly Rafale fighters from France’s Dassault aviation. Cochin Shipyard Limited is building India’s first indigenous Vikrant-class aircraft carrier. Hindustan Shipyard Limited, meanwhile, is building India’s second Arihant-class submarine, the INS Aridhaman (the first submarine in the class, INS Arihant, is under sea trials).

Under the MMRCA negotiations, India’s Hindustan Aeronautics Limited was slated to produce a portion of the total Rafale purchase (then envisaged at 126) domestically. Critics have noted that the Modi government’s decision to purchase the Rafale fighters directly from France was a major setback for India’s defense industry, with no technology transfer or domestic production intended for Indian defense firms.

The decision to build future ships indigenously will placate critics of the Rafale purchase, but India will still need to invest in foreign technology and weapon systems to outfit its warships.